Faira Home Buyer Protection: The Appraisal Guarantee
At Faira, we offer a new process to buy and sell real estate that is simple and transparent. We also provide protection for buyers so they can feel confident in the process. The Faira Appraisal Guarantee is one safety net we offer free to buyers to reduce their risk.
In a purchase and sale transaction, an appraisal is ordered by the lender to determine whether the home's contract price is appropriate given the home's condition, location and features.
Lenders want to make sure that homeowners are not overborrowing for a property because the home serves as collateral for the mortgage. If the borrower should default on the mortgage and go into foreclosure, the lender will recoup the money it lent by selling the home. The appraisal helps the bank protect itself against lending more than it might be able to recover in this worst-case scenario.
Faira Appraisal Guarantee
When you buy a home with Faira, we provide you with an Appraisal Guarantee certificate. This certificate means Faira is guaranteeing that your lender ordered appraisal will be at least the amount on the certificate.
Here is a an example:
Your Faira Appraisal Guarantee certificate is for $500,000
You offer $525,000
You have $100,000 (20%) to put down.
The lender's appraisal comes in at $450,000
Your lender will let you borrow $360,000
Your lender's appraisal came in lower than the Appraisal Guarantee, so in this scenario you are able to walk away from the deal without losing your 0.5% platform fee.
As a buyer, it is your choice to offer more than the amount on the Appraisal Guarantee. If you do, you should be sure to run the numbers so you have the cash on hand to make up the difference between the appraised value and the amount you need to borrow.
Questions about buying or selling? Contact us at firstname.lastname@example.org